Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 1551 - ITAT MUMBAITP adjustment u/s. 92CA(4) - international transactions entered with the Associated Enterprise (AE) - Comparable selection - HELD THAT:- TPO has done fresh search process in applying his own filter and came up with twenty one comparables. Out of these nine comparables were rejected without giving any reason whatsoever. We agree with assessee that this act of the TPO is classical act of cherry picking. There is no justification whatsoever as to why nine of the comparables selected by the TPO himself by applying filters selected by him only should be rejected. Hence, we uphold the order of learned CIT(A), wherein nine comparables were directed to be included in comparable search. As regards direction of learned CIT(A) that company namely ‘Nittany Outsourcing Limited’ came out of the same re-run of the search process is also acceptable. CIT(A) has directed that the TPO did not expressly reject the company ‘Crisil Marketwire Limited’ which appeared as comparable company in set of comparables in assessee’s transfer pricing study and hence he also directed this should be included in comparables. This direction of learned CIT(A) in our considered opinion is not sustainable. When learned CIT(A) is accepting that search process of twenty one comparables selected by the TPO should be adopted, then learned CIT(A) again cannot blow hot and cold and insist that one of the comparable appearing in the assessee’s original transfer pricing study should be included. This act in fact, is cherry picking by learned CIT(A) himself and the same is not sustainable. CIT(A) to disregard five of the comparables coming out of TPO’s fresh search process - We note that learned Counsel of the assessee has not made any argument in support. Learned Counsel of the assessee only confined his argument about the rejection of nine comparables and cherry picking done by the TPO. Accordingly, we direct that comparable analysis should be done on the basis of twenty one companies selected by the TPO and one more added by learned CIT(A) namely ‘Nittany Outsourcing Limited’. Marketing support adjustment of 2.30% may also be granted. Addition on account of advance received by the assessee from its holding company treated as ‘income’ - HELD THAT:- As relying on case [2012 (4) TMI 120 - ITAT MUMBAI] we find during the course of assessment proceedings the assessee has given a statement that it has received advance towards market research analysis services rendered during the year. Therefore, the details given in the balance sheet and the submissions made during the course of assessment proceedings are contradictory to each other. Neither the AO nor the Ld. CIT(A) has gone into this aspect. Therefore, when it was proposed that the issue needs verification at the level of the AO, both the parties fairly agreed that they have no objection if the matter is restored to the file of the AO - restore the issue to the file of the AO with a direction to give one more opportunity to the assessee to substantiate its claim with evidence to the satisfaction of the AO regarding the nature of advance received, its purpose and utilization and how the same has subsequently been adjusted from the bills raised by the assessee. Ground raised by the Revenue is accordingly allowed for statistical purpose. TP adjustment being notional interest on export receivable by the assessee from its AE - HELD THAT:- t this issue is covered in favour of the assessee in as much as no interest is charged in respect of outstanding receivable from AE as well as non-AE. Hence, there cannot be any occasion to make arm’s length price adjustment for notional interest in this regard - in the case of CIT Vs. Indo American Jewellery Ltd. [2013 (1) TMI 804 - BOMBAY HIGH COURT] as held in this decision that where there was complete uniformity in the act of the assessee in not charging interest from both AE and non-AE debtors for delay in realisation of export proceeds, the Tribunal was right in deleting the addition of notional interest on outstanding amount of export proceeds. Citing above said decision, learned counsel stated that this decision is squarely applicable in this case as the assessee has not charged interest from non-AEs also, adjustment made by the TPO is not sustainable. DR not make any rebuttal in this regard. - Decided against revenue.
|